Los Angeles Business Journal

MGA Files Another Case Against Mattel

By Deborah Crowe Monday, January 13, 2014

MGA Entertainment Inc. said on Monday it had sued rival toymaker Mattel Inc. for trade-secret theft related to the two companies’ longstanding battle over MGA’s popular Bratz doll line.

The suit is the latest in a nearly decade-long battle between the companies stemming from a dispute over MGA’s line of Bratz dolls. Mattel had sued MGA in 2004, contending it had stolen the concept for Bratz, whose designer had worked for Mattel before being hired by MGA.

Mattel lost that case. MGA had earlier countered with its own suit, claiming Mattel employees used fake identities to gain access to MGA’s showrooms at toy fairs to steal price lists, marketing material and other proprietary information about its products. The privately held Van Nuys company won the 2011 jury trial in U.S. District Court over those claims and was awarded $310 million.

That verdict was overturned last year, though Mattel was directed to pay nearly $138 million of MGA’s legal fees.

In the latest suit in Los Angeles Superior Court, MGA is seeking $1 billion in damages for what Chief Executive Isaac Larian said in a release was damage caused by years of litigation between the companies. The legal battles "destroyed" the Bratz brand, he said in a statement, which the company estimated was worth $2 billion in 2006.

“Rather than competing fairly in the marketplace, Mattel’s executives chose to engage in thievery, industrial espionage and fraud,” Larian said in a statement. “It’s time Mattel pays for this reprehensible behavior and the damage it caused.”

Mattel, based in El Segundo, countered that MGA’s latest claims were nothing new. “We are confident that the same stale claims brought in MGA’s lawsuit today are barred by the statute of limitations, and we look forward to the speedy and final resolution of this dispute,” spokesman Alan Hilowitz said in a statement.

Mattel shares closed down 60 cents, or 1 percent, to $44.66 on the Nasdaq.